Experton Group Weekly ICT News Internationalhttp://www.experton-group.com/
These are the international weekly ICT news from Experton Group.enExperton Group Weekly ICT News Internationalhttp://www.experton-group.com/typo3conf/ext/tt_news/ext_icon.gifhttp://www.experton-group.com/
1816These are the international weekly ICT news from Experton Group.TYPO3 - get.content.righthttp://blogs.law.harvard.edu/tech/rssSat, 01 Jun 2013 11:07:00 +0200HP’s Comeback Continues, Low-end Wants to Be Mainstreamhttp://www.experton-group.com/research/ict-news-international/news/article/hps-comeback-continues-low-end-wants-to-be-mainstream.html
Hewlett-Packard, Co. announced quarterly performance slips that were in line with projections and generally viewed as inroads in the company’s return. Elsewhere, tablet sales are on track to outpace...Hewlett-Packard, Co. announced quarterly performance slips that were in line with projections and generally viewed as inroads in the company’s return. Elsewhere, tablet sales are on track to outpace all PC sales this year while touch-screen PCs are poised to increase. Lastly, Intel Corp.'s new "Bay Trail" processor is a sign of things to come across multiple platforms.
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Despite significant market, strategic, and management turmoil at HP over the last few years, the company's CEO Meg Whitman remains optimistic about her five-year turnaround plan and pointed to quarterly results as evidence. In what she deems as a "fix-and-rebuild year," the company's second quarter raked in $27.6 billion in revenue and $1.1 billion in net income on a GAAP basis. The numbers were down 10 percent and 32 percent, respectively, compared with the previous year. HP's PC operations saw revenues and shipments fall approximately 20 percent with total notebook shipments off 24 percent. Cash flow from operations surged 44 percent and $1 billion in net debt was erased during the quarter. Investors reacted positively to the results, and with the company on track to eliminating that debt by the end of 2013, the share prices have climbed 75 percent in the last six months and rose 14 percent on announcement earnings.

New research shows that the significant changes in computing preferences will further tip the scales towards tablets by 2015. Tablet sales already outpace those of notebook PCs this year, and by 2015, tablets are expected to account for more annual shipments than desktops and notebooks combined. First quarter PC shipments fell by the largest percentage ever, 14 percent, earlier this year. Tablet success can be attributed to factors including cost, cloud-service capabilities, ease of operation, portability, and the simplicity of touch screen usability. Touch screen-based PCs only represented 4.6 million devices and less than 2 percent of touch screen shipments in 2012. Those numbers are expected to rise to 78 million and 12.3 percent of the touch screen market in 2016.

Changes are taking shape in Intel's separation between low-end/energy conserving architectures and its desktop and notebook designs. The company's forthcoming Atom tablet processor, codenamed "Bay Trail," will fork to include desktop and notebook counterparts in the coming years and assume the Celeron and Pentium brand names. Based on the Silvermont architecture, Bay Trail is three times faster and five times more energy efficient than previous Atom offerings. Silvermont also underpins new smartphone architectures.

Experton Group POV: Meg Whitman has made good on her proclamations regarding the redefinition of HP's strategy and the costs associated with reshaping one of the largest IT vendors. The company's introductions of specialized server offerings under the Moonshot branding and new client-facing computing offerings that utilize both Microsoft Corp. Windows and Google Inc. Android platforms are excellent starts. Still, much of the company's legacy and future still significant rely upon mature markets where little innovation and/or narrow margins potential put a damper of its future. Much of HP's turnaround has focused on cleaning up the company's financials, and once out of the way, its real success will be measured in revenue and margins alone. IT executives should certainly remain confident about HP's abilities to service them in areas where the company has established success; however, it remains to be seen whether HP will be able to truly return to its former greatness as a top innovator. The rise of tablet computing has brought havoc to consumer PC sales and remains a management and support complexity for IT departments. Still, PC sales within enterprises have suffered little, if at all, from tablet adoption as tablets simply lack the durability, flexibility, and power of all-purpose PC designs. Experton Group expects these facts to remain true for many years to come, and as a result, views the vendor hits taken on the consumer side of PC sales as an opportunity to negotiate exceptional PC pricing and contract terms. Intel's move to utilize the Bay Trail architecture beyond the smartphone and tablet spaces is well-suited to current market trends and smart from a financial point of view. Architecture development is a capital-intensive process; thus, the investment required per processor sold decreases with each additional item. The need for energy efficiency and availability of cloud capabilities means that PCs require less computing power, particularly in the consumer space. Bay Trail-based PC designs would allow for greater use of alternative operating systems, including Android and Chrome OS, at lower price points. IT executives should expect Bay Trail-based PCs to be mostly consumer plays; however, they may also pop-up as low-end PCs targeted at browsing and light personal productivity markets.]]>Sat, 01 Jun 2013 11:07:00 +0200Software and Cloud Up, Hardware Downhttp://www.experton-group.com/research/ict-news-international/news/article/software-and-cloud-up-hardware-down.html
Dell Inc. and NetApp Inc. reported revenue declines and general weakness in sales while CommVault Systems Inc. and Salesforce.com Inc. saw record growth in revenues.
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In what may be...Dell Inc. and NetApp Inc. reported revenue declines and general weakness in sales while CommVault Systems Inc. and Salesforce.com Inc. saw record growth in revenues.
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In what may be the last publicly reported quarter of financial results, Dell fared poorly in the PC market as expected but exceeded expectations in the networking, server, and services markets. Dell reported first quarter 2014 revenues of $14.1 billion, down a mere two percent year-over-year from the previous year's quarter. Net income on a GAAP basis was $130 million, a freefall of 79 percent from $635 million in the year ago quarter. The Enterprise Solutions Group saw a 10 percent increase in revenues along with strong margins. The server and networking revenues grew 16 percent, with networking jumping 24 percent. However storage revenues declined 10 percent. Dell Servicesrevenue gained two percent driven by an 11 percent increase in revenue for infrastructure, cloud and security services. Dell software had an undefined operating loss while the end-user computing business fell nine percent. Desktop and thin client revenues slipped two percent while mobility revenues slid 16 percent.

NetApp reported so-so fourth quarter and fiscal year 2013 results. Revenues for the fourth quarter were $1.72 billion, up one percent from the year-ago figure of $1.70 billion. Net income on a GAAP basis for the quarter was $174 million, down 3.8 percent from the previous year's quarter. Full fiscal 2013 revenues were $6.33 billion, up only 1.6 percent from fiscal year 2012's $6.23 billion. Net income on a GAAP basis for the year was $505 million, a decline of 17 percent from 2012's $605 million. The company also laid off 300 staff – with the potential for more to go – to contain costs. Conversely, CommVault, an archiving and data management software company, reported record fourth quarter 2013 revenues of $138.3 million, a jump of 21 percent year-over-year. Net income on a GAAP basis was $17 million, up 73 percent from the year ago quarter. For the full fiscal year the company had revenues of 496 million, a gain of 22 percent over fiscal year 2012. Net income on a GAAP basis for the year was $53.2 million, an increase of 67 percent.

Once again Salesforce.com announced strong first quarter fiscal 2014 results. The cloud computing company reported revenues of $893 million, a leap of 28 percent over the prior year's quarter. However, on a GAAP basis the company experienced a net loss of $67.7 million, much worse than the year-ago quarter of $19.5 million. Subscription and support revenues climbed 29 percent year-over-year while professional services and other revenues grew 25 percent. The company projects its full year revenues will be greater than $3.8 billion, a gain of 26 percent or more. The cost for marketing and sales as a percentage of total revenues declined slightly to 52 percent.

Experton Group POV: Hardware sales remain under pressure and companies dependent upon strong sales growth and good margins will continue to show disappointing results. Commoditization of hardware and shifts to lower cost units are and will cause margins to shrink. Dell is combating the precipitous decline in PC revenues with its expansion in the data center space. Although it has not been able to gain traction with its acquired storage offerings, its networking, server, and services units are performing well. Dell's low-cost vendor model currently works well; however, this may change when the company goes private and attempts to do more upselling in the enterprise space. It is also doubtful the company will abandon its PC roots but regaining a leadership position in the PC, smartphone, tablet market will be a major challenge. NetApp is experiencing a similar challenge. Its markets have matured and it has yet to break through with new, exciting offerings. Flash storage will cause the company additional grief in that it is dramatically changing the storage landscape and will put additional pressures on margins. The company will need to take some bold steps if it wants executives to once again consider it as a storage leader. While the hardware sector is struggling, parts of the software market and cloud computing remain on a tear. There does not appear to be any let up in the demand for storage capacity and the trend is projected to continue for years to come. This double-digit expansion will serve CommVault well over the next few years, unless the company's execution falters. Similarly, Salesforce.com maintains its double-digit growth record into one more year. The only red flag for the cloud vendor is the cost of sales which has put the company in the red. Salesforce.com made solid profits in 2010 but its current cost structure is troubling, especially spending more than half of its revenues on sales. One would think that with all the hype, Salesforce.com could achieve its revenue growth without spending so much on the cost of sales, which exceeds that of traditional software sales. This is not a good sign for the cloud computing business, if this proves to be more than just a Salesforce.com-related issue. Thus, in contrast to the hype, if cloud computing is a hard sell, then the long-term viability of cloud providers without deep pockets should be a concern to enterprise executives. IT executives should be defining their long-term data center strategies before they winnow down their targeted provider list; and only then, should IT executives push preferred providers for better deals – which should consist of better prices, additional services, SLAs or terms and conditions. ]]>Sat, 01 Jun 2013 11:06:00 +0200CEOs CIOs not in Synchttp://www.experton-group.com/research/ict-news-international/news/article/ceos-cios-not-in-sync.html
According to a post on the Harvard Business Review blog CEOs and CIOs are not in sync when it comes to the new challenges and issues CEOs are facing. Study findings point to the fact that CIOs do not...Harvard Business Review blog CEOs and CIOs are not in sync when it comes to the new challenges and issues CEOs are facing. Study findings point to the fact that CIOs do not understand where the business needs to go, and CIOs do not have a strategy to address business challenges or opportunities.Focal Points:

Key findings from their research are almost half of the CEOs feel IT should be a commodity service purchased as needed. Almost half of the CEOs rate their CIOs negatively in terms of understanding the business and how to apply IT in new ways to the business. Only 25 percent of executives felt their CIOs were performing above their peers. Moreover, 57 percent of CEOs expect their IT function to change significantly over the next three years, while 12 percent predict a "complete overhaul" of IT.

The above findings are attributed to four trends that are changing the CIOs role. Many CEOs are moving away from ownership and return on assets or investment (ROA or ROI) analyses and are thinking about renting IT equipment for items not directly tied to value creation. The shift from efficiency and scalability to agility and efficacy translates into a movement away from transactional systems to new systems that provide agility, collaboration, and transparency. Thirdly, the boundaries between contractors, channels, customers, partners, staff, suppliers, and even competitors are diminishing and in some cases disappearing, creating a whole new user community for enterprise IT systems. All of this changes how companies manage and organize work and resources, which suggests the need for more unique, niche applications with integration of information and systems across organizational and agent boundaries.

In summary it states there new systems, business and delivery models, types of information, technologies, and whole new roles for IT in the enterprise's ecosystem. These new business insights, tied to the emergence of new technologies, are creating an opportunity for IT to lead business transformational efforts, creating new business models, initiating new business processes and making the enterprise agile in this challenging economic environment, the report concludes.

Experton Group POV: Business executives that think IT should be a commodity service purchased as needed do not perceive IT as a business differentiator. That is problematic for their businesses and for IT executives that work for them. IT executives in those organizations need to enlighten the business executives on the flaws in their thinking. As to the four trends identified, Experton Group and other studies have also found these to be true, which is why Experton Group has been pushing for IT executives to transform their operations. Business and IT always exist in a state of change, including disruptive innovation, and the next decade will be no different. IT executives must work with business executives to help transform the business and expose them to new process possibilities that are available due to the emerging technologies. IT executives must believe (and pursue) their role is to sell the business – e.g., sell cereal if they work for Kellogg's – and not be a "tech head" if they want a seat at the business table.]]>Fri, 03 May 2013 11:09:00 +0200Troubling IT Financials http://www.experton-group.com/research/ict-news-international/news/article/troubling-it-financials.html
EMC Corp. and VMware Inc. reported solid first quarter 2013 revenues but lower earnings while IBM Corp. failed to meet expectations on both sides.
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EMC reported first quarter 2013...Focal Points:

EMC reported first quarter 2013 revenues of $5.39 billion, up six percent year-over-year from the previous year's $5.09 billion. Net income on a GAAP basis was $615 million, down two percent from $626 million in the year ago quarter. EMC saw 12 percent growth in its RSA division and 13 percent from its VMware subsidiary. Information Intelligence Group (IIG) expanded seven percent but the core information storage business only grew three percent year-over-year. However, the high-end storage sales jumped 10 percent while the unified and backup/recovery unit shrank slightly. From a geographic standpoint EMC made major gains in its Latin America business but from a small base; all other geographies increased in the single digits. The company also reported that nearly 50 percent of the Vblock demand came from new customers.

IBM announced first quarter revenues of $23.4 billion, down five percent from the previous year's $24.7 billion. Net income on a GAAP basis was $3.03 billion, a year-over-year decline of one percent from $3.07 billion. The company's System and Technology unit saw a drop of 17 percent in revenues. System z revenues were up eight percent but all the other units reported declines, with Power Systems bearing the brunt with a 32 percent revenue slippage. The Software Group was relatively flat in revenues with WebSphere and Social Workforce Solutions growing six and eight percent respectively and other units fairly flat. Global Business Services revenues shrank 3.3 percent and Global Technology Solutions revenues slid 4.3 percent. IBM's Global Financing unit revenues improved almost 2 percent. IBM revenues slipped in all geographies, including BRIC countries, which company executives attributed to a drop in mid and low end system sales. On the plus side, IBM's Smarter Planet initiative grew more than 25 percent, business analytics revenues were up seven percent and its cloud business fluffed up more than 70 percent.

VMware reported first quarter revenues of $1.19 billion, an increase of 13 percent from the previous year's $1.06 billion. Net income on a GAAP basis was $174 million, a decline of nine percent from the year-ago's quarter of $191 million. License revenues were up slightly from the previous year's quarter while services revenues jumped by 23 percent. U.S. sales increased slightly to 47.7 percent. EMC and VMware are reswizzling assets and creating a new entity called Pivotal. Approximately $700 million in 1Q revenues was moved into Pivotal from the two companies. These include product and services revenues from Cetas, Cloud Foundry, Gemfire, Greenplum, Pivotal Labs, Spring, and some products from the VMware vFabric Suite. VMware will now focus on the software defined data center, hybrid clouds, and end user computing.

Experton Group POV: The heady growth days are over for the major players and with the global economy struggling, increased revenues, sales and incomes will be a big challenge for large IT providers. IBM and Oracle Corp. executives blamed the revenue shortfall on sales people not closing a number of critical transactions, which slipped into the second quarter. That sounds like bravado as the U.S. economy is slipping again while Europe hovers in and out of recession. China's economic growth is also dropping while an asset bubble is taking shape. Other Asian countries and Brazil are also seeing a slowdown. When overall business revenues decline, IT infrastructure and service revenues shortfalls cannot be far behind. IT providers will end up either losing sales and revenues or giving deeper discounts or both. Margins will also drop. IT executives should expect this year to play out economically like last year and therefore, should plan on budgets and resource actions to potentially follow a similar path. Moreover, IT executives should aggressively push providers for better deals – which can consist of better prices, additional services, SLAs or terms and conditions. ]]>Fri, 03 May 2013 11:08:00 +0200Disruptive Changeshttp://www.experton-group.com/research/ict-news-international/news/article/disruptive-changes.html
Amazon Inc. and Microsoft Corp. lowered their pricing for certain cloud offerings in attempts to maintain leadership and/or preserve customers. Similarly, Hewlett-Packard Co. (HP) launched its...Amazon Inc. and Microsoft Corp. lowered their pricing for certain cloud offerings in attempts to maintain leadership and/or preserve customers. Similarly, Hewlett-Packard Co. (HP) launched its next-generation Moonshot hyperscale servers. Meanwhile, IDG Connect, the demand generation division of International Data Group (IDG), released its survey findings that show there may be a skills shortage when it comes to the soft skills required when communicating beyond the IT walls.
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Earlier this month Amazon price reduced the prices it charged for its Windows on-demand servers by up to 26 percent. This brought its pricings within pennies of Microsoft's Windows Azure cloud fees. The price reductions apply across Amazon's standard (m1), second-generation standard (m3), high-memory (m2), and high-CPU (c1) instance families. CEO Jeff Bezos stated in the Amazon annual report the strategy of cutting prices before the company needs to, and developing technologies before there is a financially motivating factor, is what protects the company from unexpected markets shifts. Microsoft has responded by aggressively cutting its prices by 21 to 33 percent for hosting and processing customer online data. In order for customers to qualify for the cuts they must make monthly commitments to Azure for either six or 12 months. Microsoft also is making its Windows Azure Virtual Network technology (codenamed "Brooklyn") generally available effective April 16. Windows Azure Virtual Network is designed to allow companies to extend their networks by enabling secure site-to-site VPN connectivity between the enterprise and the Windows Azure cloud.

HP launched its initial Moonshot servers, which use Intel Corp. Atom low-cost, low-energy microprocessors, This next-generation of servers is the first wave of hyperscale software defined server computing models to be offered by HP. These particular servers are designed to be used in dedicated hosting and Web front end environments. The company stated that two more "leaps" will be out this year that will be targeted to handle other specific workloads. HP claims its architecture can scale 10:1 over existing offerings while providing eight times the efficiency. The Moonshot 1500 uses Intel Atom S1200 microprocessors, utilizes a 4.3U (7.5 inch tall) chassis that hosts 45 "Gemini" server cartridges, and up to 1800 quad-core servers will fit into a 42U rack. Other x86 chips from Advanced Micro Devices Inc. (AMD), plus ARM processors from Calxeda Inc., Texas Instruments Inc., and Applied Micro Circuits Corp. (AMCC) are also expected to be available in the "Gemini" cartridge form factor. The first Moonshot servers support Linux, but are compatible with Windows, VMware and traditional enterprise applications. Pricing starts at $61,875 for the enclosure, 45 HP ProLiant Moonshot servers and an integrated switch, according to HP officials. (For more on this topic see this week's Research Note "HP's Moonshot – the Launch.")

According to a new study by IDG Connect, 83 percent of European respondents believe there is no IT skills shortage while 93 percent of U.S. respondents definitely feel there is a gap between the technical skills IT staff possess and the skills needed by the respondents' companies. IDG attributes this glaring differentiation to what are loosely defined as "hard" (true technical skills and competencies) and "soft" (business, behavioral, communications, and interpersonal) skills. The European respondents focused on hard skills while their American counterparts were more concerned about the soft skills, which will become more prevalent within IT as it goes through a transformation to support the next-generation data center environments and greater integration with the business. As IT becomes more integrated with the business and operational skill requirements shift, IDG concludes "companies can only be as good as the individuals that work within them. People … are capable of creative leaps of thinking and greatness that surpass all machines. This means that any discussion on IT skills, and any decision on the qualities required for future progression are fundamental to innovation. This is especially true in IT, where the role of the CIO is rapidly expanding within the enterprise and the department as a whole is becoming increasingly important to the entire business. It seems IT is forever teetering on the brink of bigger and better things - and it is up to the people within it to maximize this potential."

Experton Group POV: IT always exists in a state of disruptive innovation and the next decade will be no different. Whether it is a shift to the cloud, hyperscale computing, software-defined data center or other technological shifts, IT must be prepared to deal with the business and pricing models that arise. Jeff Bezos is correct by not sitting on his laurels and constantly pushing the envelope in pricing and services. IT executives need to do the same and deliver comparable services at prices that appeal to the business while covering costs. This requires keeping current on technology and having the staff on board that can solve the business problems and deliver innovative solutions that enable the organization to remain competitive. Experton Group expects the staffing dilemma to emerge over the next few years as data centers transform to meet the next generation of business and IT needs. At that time most IT staff will not need the current skills they use but skills that allow them to work with the business, providers and others to deliver solutions built on logical platforms (rather than physical infrastructure). Only a few staff will need to know the nuts and bolts of the hardware and physical layouts. This paradigm shift in staff capabilities and skills must be anticipated if IT executives do not want to be caught behind the curve and left to struggle with catching up with demand. IT executives should be developing their next-generation IT development and operations strategies, determining skills needed and the gap, and then begin a career planning and weaning-out process so that IT will be able to provide the leadership and skills needed to support the business over the next decade of disruptive innovation. Additionally, IT executives should determine if Moonshot servers are applicable in their current or target environments, and if so, conduct a pilot when the time is right. ]]>Tue, 16 Apr 2013 11:12:00 +0200PC Sales Fall Off the Cliffhttp://www.experton-group.com/research/ict-news-international/news/article/pc-sales-fall-off-the-cliff.html
The precipitous drop in PC sales is taking its toll throughout the supply chain as Microsoft Corp., Intel Corp., and virtually all of the hardware manufacturers saw revenues and profits tumble...Microsoft Corp., Intel Corp., and virtually all of the hardware manufacturers saw revenues and profits tumble nastily.
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The disastrous effects of tablet popularity and new Microsoft's Windows 8 operating system have wrecked PC sales. Representing a nearly 14 percent slide in sales, vendors worldwide PC shipments have fallen year-over-year from 88.6 million to 76.3 million in the first quarter. Acer Inc. felt the hardest hit and moved 31 percent fewer systems this quarter than in 2012, Hewlett-Packard, Co.'s sales fell nearly 24 percent, and Dell Inc.'s shipments dove almost 11 percent. To try and stem the tide, PC manufacturers are incenting customers with historically low prices and enticing values. Lenovo Group, Ltd. saw the only "victory" among the top-tier players as its sales were somehow flat thanks to well-received new designs, competitive pricing, and customer interest in its sturdy designs and strong keyboards.

Intel sales and profits have suffered severely as PC sales plummeted according to its recent quarterly filings. Though overall revenues were down a mere 2.5 percent to $12.6 billion for the quarter, profits plummeted 25 percent to $2.05 billion. Company CEO, Paul Otellini, thinks it can help Microsoft improve its dismal sales of Windows 8 RT tablets by helping price points get to $200 thanks to less expensive processors. Intel's Data Center Group was the bright spot in its quarterly filing showing a 7.5 percent increase in sales up to $2.6 billion. The poor overall performance came as a bit of a shock for Intel and other vendors tied to the PC market as the 14 percent drop in PC sales was predicted to be much softer at less than eight percent.

Windows 8 caused many consumers to delay their PC upgrades and shunned new offerings once they saw the new software design they were getting. Chief complaints include the removal of the familiar "Start" button, the costs associated with new touch designs, the unintuitive nature of Windows 8 with non-touch interfaces, and the distractions associated with the Metro user interface. Microsoft is reportedly considering bringing the "Start" button back and allowing users to boot directly into the familiar interface with the next version of Windows 8, codenamed Windows Blue, later this year. The company is also looking to expand into emerging markets including smart watches to make up for lost Windows revenue.

Experton Group POV: Microsoft's missteps in addressing the increase in tablet popularity by hybridizing Windows 8 with Metro and traditional interface cues have cost it and its PC vendor partners dearly. While the use of alternative devices including tablets has and would have been on the rise no matter how functional and attractive Windows 8 was, Microsoft's interpretation of platform advancement and unity has not been received as such. While many vendors outwardly pledge continued support and interest in Windows 8-based devices, they are desperately searching for alternative platforms and revenue streams to balance the deficits suffered. Intel, too, has suffered significantly due to lack of PC interest and a very immature mobile processor strategy. Though the heyday of the PC as the preeminent (and sole) personal computing device has past and will never regain its former glory, the PC market in general will remain, as multi-purpose computing devices have ongoing roles in both the consumer and corporate worlds. The forthcoming Windows Blue update to Windows 8 hopes to increase PC sales to levels before the slide but PC-related vendors should consider it a win simply if shipments numbers can creep back to already-weakened 2012 levels. Unfortunately, even that looks like an impossibility given market trends. IT executives should find PC vendors falling over themselves to win new business of any kind by dropping prices, offering favorable financing and leasing rates, and bundling free or highly-discounted services with sales. This is an excellent opportunity to apply pressure by re-evaluating the vendor mix and renegotiate current contracts even for enterprises that performed these evaluations last year. Effort invested can result in savings that more than make up for the associated costs.]]>Tue, 16 Apr 2013 11:11:00 +0200Oracle and Research in Motion – On the Cusp?http://www.experton-group.com/research/ict-news-international/news/article/oracle-and-research-in-motion-on-the-cusp.html
Oracle Corp. reported disappointing third quarter revenues, especially on the hardware side; additionally, the company announced two new lines of Sparc servers. In other news, Research in Motion...Oracle Corp. reported disappointing third quarter revenues, especially on the hardware side; additionally, the company announced two new lines of Sparc servers. In other news, Research in Motion Ltd., (RIM) now doing business as BlackBerry, saw its fiscal fourth quarter revenues drop but the company made a profit and shipped more than one million BlackBerry z10 smartphones.Focal Points:

Oracle released its third quarter 2013 financials, which showed little overall change in revenues from the previous year's quarter. Total revenues for the quarter were $8.96 billion, a drop of one percent from last year's $9.04 billion. Net income for the quarter on a GAAP basis was $2.50 billion, virtually unchanged year-over-year. New software licenses and cloud subscriptions were down two percent year-over-year while hardware system products revenues shrank by 23 percent from the previous year's quarter. Hardware systems support revenues and services revenues declined six and eight percent respectively. However, co-President Mark Hurd claimed SaaS sales grew in excess of 100 percent over the same time period. Total cloud revenues for all platform types were $238.0 million in the quarter. Oracle officials stated its engineered systems (Exadata, Exalogic, Exalytics) continued to experience significant growth with more than 800 systems sold in the quarter.

Oracle launched new lines of M5 and T5 Sparc processors. The T-series Unix servers are based on the Sparc processors Oracle designs in-house; whereas the higher-end M-series processors are built by Fujitsu Group, run on Fujitsu's Sparc64 chips, and are resold by Oracle. The new families are part of a shift by the company to converge the two lines onto a single chip architecture. The five new T-series mid-range systems, which use the Sparc T5 processor, doubles the core count over the Sparc T4, from eight cores to 16, and boosts the clock-speed, I/O bandwidth and memory bandwidth. Officials claim the new servers provide a performance boost for databases, Java middleware and business applications. CEO Larry Ellison claims the new Sparc M5-32 server, which has 32 sockets using six-core M5 chips and scales up to 32 TB of memory in a single rack, offers three times the price/performance compared to IBM Corp.'s Power 795 system, and has an order of magnitude better value-for-dollar compared to the legacy high-end Sparc Enterprise M9000 machines from Fujitsu. The difference between the M5 and T5 processors is that the M5 has fewer cores per chip, six times larger L2 cache, and additional features required for high performance processing.

RIM, which officially changed its corporate name to BlackBerry, released its fourth quarter and full fiscal 2013 results. For the fourth quarter RIM had revenues of $2.7 billion, a drop of 36 percent from the previous year's quarter of $4.2 billion. Net income for the quarter on a GAAP basis was $98 million versus a loss of $125 million in the fourth quarter of 2012. For the full fiscal year RIM had revenues of $11.1 billion, down 40 percent from $18.4 billion in fiscal 2012. In fiscal 2013 the company had a net loss of $646 million, whereas in 2012 it had a net income on a GAAP basis of $1.16 billion. RIM reported a gross margin of 40 percent due to higher average selling prices and hardware margins. The company shipped six million smartphones, including one million of the new BB z10 units, and 370,000 PlayBook tablets. The subscriber base shrank three million in the last quarter to 76 million. The z10 has been on the market for approximately one month and the U.S. z10 results are not included in the numbers. The z10 lacks a keyboard; the Q10, which has the classic BlackBerry keyboard, is not yet available for sale. Moreover, CEO Thorsten Heins states RIM is not a phone company but a mobile computing company whose networks and operating system can be used to connect a wide range of devices. He sees BlackBerry selling hardware, software and mobile computing services, especially to those that require widespread and secure networks. Or, more specifically, his vision for BlackBerry is that of a service-enabler that just happens to sell hardware.

Experton Group POV: BlackBerry and Oracle are companies that appear to be going through inflection points in their businesses and business models. Experton Group believes BlackBerry has survived the worst and is now changing our position that the company is doomed and that IT executives need to transition off of their smartphones. BlackBerry will be around for a few more years at a minimum – as an independent company or as an acquisition. Moreover, BlackBerry remains focused on its core competencies: ease of use, performance, standards, and security. Thus, IT executives concerned about endpoint security should keep BlackBerry devices on their short list of smartphone options. Oracle is betting heavily that its engineered systems and new Sparc servers can help the company regain its momentum. Certainly there are a number of Oracle|Sun server customers that will upgrade to the new processors but odds that the company can reverse the slide and gain market share are slim. Furthermore, aside from the acquired cloud assets Oracle is not making great gains in moving customers to Oracle in the cloud. Still missing from its portfolio are offerings that enable customers to treat Oracle environments as software-defined environments so that the applications and/or databases can run in the data center, in the cloud or in a hybrid mix. This leaves Oracle in catch-up mode and without an express vision of its intent. Nonetheless, one should not count Oracle out of the race – it always manages to find ways to get back in the game and keep a good number of its customers satisfied (or at least in the fold). IT executives should understand Oracle's roadmaps, strategies and vision – but be wary of the hype and delivery commitments. Additionally, IT executives interested in the new processors or engineered systems should pilot them to see how they stack up in the corporate environment. Lastly, IT executives should consider use of third-party maintenance services where they can. Most third-party providers' rates are about half of Oracle standard rates. ]]>Tue, 02 Apr 2013 11:16:00 +0200Security Threats and Risk Report http://www.experton-group.com/research/ict-news-international/news/article/security-threats-and-risk-report.html
IBM Corp. released its X-Force 2012 Annual Trend and Risk Report. The report point out the frequency of data breaches and incidents continues to increase. Mobile devices, especially bring your own...IBM Corp. released its X-Force 2012 Annual Trend and Risk Report. The report point out the frequency of data breaches and incidents continues to increase. Mobile devices, especially bring your own devices (BYOD) that tend to be less secure, and Web browser exploits are top security challenges, while distributed denial-of-service (DDoS) attempts received the most new coverage.
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Security incidents grew 40 percent in 2012 over 2011 according to the Open Security Foundation. The level of sophistication has increased, although the majority of the security incidents disclosed was carried out by non-sophisticated attackers using off-the-shelf tools and technique to go after a broad target base. SQL injection remains the most popular point of entry for extracting data from a Web site. Cross-site scripting (XSS) also dominated the Web vulnerability disclosures. The next most popular attack method was the DDoS bombardments upon the banking community. Java also continues as a key target for attackers as it has the advantage of providing a cross-browser and cross-platform entry point.

For the first time the X-Force report included trend analyses from the Managed Security Services (MSS) unit which monitors tens of billions of events per day across 130 countries. MSS finds cyber attackers tend to follow a seven step penetration protocol: reconnaissance, probe and attack, obtain a toehold, advancement to privileged account, stealth, listening post, and takeover. MSS rankings of the volumes and types of security incidents are as follows: malicious code; probes and scans, unauthorized access, inappropriate use, and then denial of service.

Spam volume remained flat in 2012. India got top honors for spam origination with the U.S. coming in second. Conversely, the U.S. was number one in security breaches (46 percent) with the UK second with only eight percent of the breaches. Australia and India tied for third at three percent.

Experton Group POV: Companies must gear up to protect themselves from broad-based cyber attacks by non-state and enterprise players as well as targeted, sophisticated cyber crimes and espionage by corporate, organized crime, or state-run organizations. The challenges can be expected to escalate year-over-year, which will require enterprises to constantly improve their game. BYOD, collaboration, mobility, social and Web portals that obscure corporate boundaries expose organizations to cyber attacks. IT executives will need to take a holistic approach to security that addresses the issues collaboratively with other organizations so that they are not solely reliant on just their own attack information. IT execs should perform regular security audits, ensure passwords are strong and secure, improve endpoint control, and provide multiple layers of application, data and network protection. Additionally, IT executives should communicate with and educate users on how to spot and deal with cyber attacks and work with business partners and suppliers to ensure their policies are consistent with the company's. ]]>Tue, 02 Apr 2013 11:15:00 +0200Hybrid Clouds and the Software-Defined Data Center http://www.experton-group.com/research/ict-news-international/news/article/hybrid-clouds-and-the-software-defined-data-center.html
EMC Corp. and VMware Inc. held a Strategic Forum last week for financial analysts in which it announced corporate visions and plans for delivering software-defined data center (SDDC) offerings and a...EMC Corp. and VMware Inc. held a Strategic Forum last week for financial analysts in which it announced corporate visions and plans for delivering software-defined data center (SDDC) offerings and a VMware hybrid cloud. In other cloud news, ATScloud, the cloud services unit of ATS National Inc., and ExaGrid Systems Inc. have partnered up to offer cloud-based Disaster Recovery as a Service (DRaaS). ExaGrid customers will now have the option to replicate their backup data to ATScloud’s secure cloud infrastructure, reducing or eliminating the need to vault tapes off-site for disaster protection.
Focal Points:

EMC and VMware outlined their vision for data centers morphing into software-defined data centers and their plans for being a leader in the transformation. In a SDDC all infrastructure is virtualized and delivered as a service, and control of the data center is entirely automated by software. The data center is thus abstracted and components pooled and then control and management is all automated and orchestrated. The companies gave an overview of the targeted markets and how they will address the compute, network and storage domains. (See chart.)

VMware announced a new hybrid cloud strategy whereby it delivers a common platform that allows customers to easily shift workloads and data between an internal VMware-based cloud environment and a new VMware-operated public cloud. The company believes that by providing consistency across the private and public cloud environments customers would more rapidly adopt environments that incorporate an on-premises private cloud with a hosted public cloud. Executives extolled the advantage of achieving "hybrid cloud nirvana" in which applications can scale between either environment based on resource need without any changes. The company did not release any information on pricing or how the service will be set up. However, VMware is moving into a space where its infrastructure as a service (IaaS) offering will be competing with its partners. VMware's hybrid cloud vision is shown below.

ATScloud and ExaGrid launched their joint cloud-based DRaaS solution which will allow customers to secure storage of data in ATScloud's tier IV data centers in the U.S. The companies state that a worldwide offering will be available at a later date. Users of ExaGrid backup appliances can now choose the cloud service for a remote copy of their backed-up data instead of maintaining a separate ExaGrid device or a tape system. Should their primary backup appliance fail or not be reachable in a disaster, those customers will be able to get their data back from ATScloud over the Internet or in a shipped appliance. Customers can buy storage capacity in the ATScloud on an as-needed basis and pay per gigabyte. The executives claim the use of this method should cost about half as much as a dedicated ExaGrid appliance at a collocation site but actual prices will be set by ExaGrid's channel partners and ATScloud's Managed Service Providers (MSPs).

Experton Group POV: Software-defined data centers will become the standard over the next decade but the market is still immature and there are a lot of issues yet to be resolved. The least developed component is the software-defined network. While Cisco Systems Inc. and Hewlett-Packard Co. (HP) have offerings and it is rumored IBM Corp. will soon follow, most enterprises have yet to make major headway in this area. Until the networks can be virtualized and then automated, managed and orchestrated, the SDDC will struggle to become reality. Thus, it will take four to five years before all the components have matured and the solutions are accepted as mainstream; then, software-defined data centers will start to become the norm. VMware's move into becoming an operator of a public cloud should be viewed as a defensive one, even though the opportunity for them is large and they will make headway in the market. Microsoft Corp. already has its Windows System Center offering that can manage Microsoft-based internal private clouds and its Windows Azure public cloud. There are OpenStack solutions as well and even Amazon Inc.'s Amazon Web Services (AWS) has partners, like Eucalyptus Systems Inc., that claim to offer the private-cloud equivalent of AWS. The ATScloud offering provides ExaGrid users with what is claimed to be a less expensive solution to data backup and disaster recovery. From a data protection standpoint the offerings provides users with a level of confidence that in case of onsite data loss, the company can recover – either by use of the ATScloud or via a shipped appliance. However, the claim that the costs will be less remains to be seen. IT executives should walk before they leap into the next-generation of data center and cloud environments. IT executives should pilot their preferred solutions to ensure the IT services can be delivered as promised and then use the lessons learned as inputs to when they move forward with the next phase of the data center transformation.]]>Mon, 18 Mar 2013 11:18:00 +0100Mobile and Security Updatehttp://www.experton-group.com/research/ict-news-international/news/article/mobile-and-security-update.html
Lenovo Group, Ltd. introduced a refresh for its ThinkPad brand that makes use of more streamlined and updated style elements. Elsewhere, findings presented last week at Black Hat Europe 2013...Lenovo Group, Ltd. introduced a refresh for its ThinkPad brand that makes use of more streamlined and updated style elements. Elsewhere, findings presented last week at Black Hat Europe 2013 demonstrate the need for security validation and best practices implementations on security appliances. Lastly, BlackBerry touted a "containerization" technology that extends smartphone workspace separation to non-BlackBerry devices.Focal Points:

Lenovo's ThinkPad line is getting a design refresh to keep apace with the lighter, slimmer designs have become commonplace since Apple Inc.'s MacBook Air blazed the trail nearly five years ago. The new ThinkPad T431s features a 14" screen that can tilt 180 degrees, weighs three pounds, and is 20.6 millimeters thick. Compared to the outgoing model, this represents a weigh savings of 24 percent and a height reduction of 21 percent. Other changes include the removal of physical mouse buttons for virtual ones integrated into the touchpad and the elimination of an optical drive. Familiar ThinkPad cues including the signature black hue and TrackPoint mouse pointing stick remain. The T431s uses Intel Corp. third-generation Core-I processors (Ivy Bridge), can support up to 12 gigabytes (GBs) of RAM, and arrives next month at a starting price of $949.

In a presentation entitled "Ironic Exploitation of Security Products," a security-group tester argued that a majority of security appliance products from leading vendors inherently lack necessary protection. The findings address firewalls, remote access servers, united threat management (UTM) systems, and Web gateways, many of which use Linux as their starting point. Nearly 80 percent of the products tested had flaws that were easy for a professional to identify, relied on outdated Linux kernels with antiquated packages and unneeded packages, and did not employ hardened file system protections with integrity checking or kernel safeguarding. Other noted insecure practices include product model and version exposure to unauthenticated users, cross-site request, cross-site scripting flaws that allowed session hijacking, and interfaces that allowed for command injection and privilege escalation. All of the vulnerabilities found were reported to product vendors and many have been addressed via updates and their details shared with customers, according to the presentation.

BlackBerry aims to bring a portion of its long-heralded security features to Google Inc.'s Android and Apple iOS platforms in the form of its new Balance work/personal separation feature found on its latest BB10-based solutions. Based on Balance and called BlackBerry Secure Work Space for iOS and Android, the product puts work-related services in a container linking the non-BlackBerry devices to BlackBerry Enterprise Service (BES) 10. Applications for calendaring, contacts, document editing, e-mail, and secure browsing are included in the offering. As new apps are desired, enterprises can deploy them without the need for source code modification and manage them using BES10. The solution is currently in beta at select corporate and government customers and is expected to be widely available around the end of June. Support for Microsoft Corp. Windows Phone may be added at a later date should sufficient corporations voice an interest.

Experton Group POV: Although the definition of "good design" is at least somewhat open to personal interpretation, the new Lenovo T431s approach – which should see design cues coming to other ThinkPad products later this year – will find favor on most fronts. Most lamented will likely be the removal of physical mouse buttons and the demise of traditional keyboards for island-style ones. The rest of the ThinkPad spirit and approach remains intact and IT executives should expect the ThinkPad notions of quality and durability to persist in this and future models. Despite having the word security in their name, security appliances are like everything else in the enterprise and thus subject to flaws and exploits. IT administrators need to employ best practices when it comes to both security and appliance usage including verification of corporate standards compliance, deployment of multiple technologies, and regular updating and patches. IT executives should ensure that administrators use a separate browser configured to block extension usage for security administration and should lockdown Web interfaces and SSH services. BlackBerry's forthcoming Secure Work Space for iOS and Android is an interesting approach to extending BlackBerry-like "containerization" capabilities and leveraging corporate investments in BES with alternative smartphones. The separation of work and personal interfaces on smartphones is becoming increasingly necessary as bring your own device (BYOD) solutions present themselves as potential backdoor entry points into the corporate infrastructure. BlackBerry's methodology remains unproven as the first round of BB10 devices are just leaving the shelves and juries remain out as to how long or if the company and its products are viable long term. IT executives heavily invested in BlackBerry's infrastructure should consider Secure Work Space for iOS and Android for pilot programs if the capabilities, cost, and three-year outlook with the vendor make sense.]]>Mon, 18 Mar 2013 11:17:00 +0100